9. Tax Deferral Calculator SALE VS. EXCHANGE (Example) 1) Calculate Net Adjusted Basis Original Purchase Price (Basis) $500,000 + Capital Improvement $50,000 - Depreciation -$150,000 = Net Adjusted Basis $400,000 2) Calculate Capital Gain Sales Price $1,200,000 - Net Adjusted Basis -$400,000 - Cost of Sale -$80,000 = CAPITAL GAIN $720,000 3) Calculate Capital Gain Tax Due Recaptured Depreciation (25%) $37,500 + Federal Capital Gain (15%) $85,500 + State Tax (IN 3.4%) $24,480 TOTAL TAX DUE $147,480